What to Expect in a Home Closing as a Buyer & Seller

If you’re not an experienced house buyer or seller, the closing process can be tricky, complicated and seem overwhelming. With all of the potential steps involved, it can be hard to know what to expect.

Whether you’re buying a home or selling one, we hope this information helps you feel a bit more prepared and secure on closing day!

Home Buyers

Schedule a Visit

Before the closing date, you’ll want to schedule your pre-closing visit of your new home. This visit will allow you to do one final inspection of the house, so you know that there haven’t been any changes to its condition since you signed your offer.

Expect Some Added Costs

When you buy a house, your real estate lawyer will receive a statement from the home sellers listing any adjusted costs. These costs are often associated with prepaid expenses, like property taxes or any utilities they have paid for upfront. You’ll have to reimburse them for anything they’ve paid for on the property after the closing date, and it can add up to 0.5% more to your final cost. You should also be aware of Land Transfer Tax, which every homebuyer must pay. This is calculated on a sliding scale, but can add significant cost if homebuyers aren’t expecting it. On a $500,000 house, you could expect to pay $6,500 in Land Transfer Tax.

Discuss Title & Title Insurance with Your Lawyer

Ask your lawyer to purchase title insurance for your new home. In the event that anyone tries to claim ownership of the property or there are any land survey issues, you’ll be covered. You will also need to talk to your lawyer about how you are taking title to the property. Joint tenants, for example, means if one of you passes away, the other person becomes the owner. Tenants in common, on the other hand, means you can pass your property to a beneficiary through your will.

Determine Deductions

If you pay less than 20 per cent down on your mortgage, your bank will deduct certain costs like mortgage insurance, appraisal fees and HST. Make sure you know early on what these deductions include and how much they total, and give your mortgage lender proof of income or a down payment so there are no delays. To close the deal, you have to deliver the balance to your lawyer to close the deal at least 2 days before the closing date.

Arrange Moving & Utilities

Keep in mind that before you move into your new home, the old owner has to move out. Try to plan to move into your new home in the late afternoon to give the previous owner plenty of time to move out. For condos, make sure you have the use of the elevator. You’ll also need to take care of your utilities. It’s the buyer’s responsibility to make sure all of the utilities for the house are under their name as of the closing date, and it’s a good idea to get your meters read on the closing day so you only pay for utilities after you have moved in. Ask your cable, telephone and other utility providers to come to your house immediately after closing.

Home Sellers

Give Your Lawyer Adequate Paperwork

When you bought your house, you should have received a deed, mortgage, survey and other important documents from your lawyer. You will need to return these, as well as current property tax bills, to your lawyer when you sell your home.

Wait to Cancel House Insurance

Never cancel your house insurance before your sale has closed. Always wait until you have heard that the deal has closed and the sale has gone through. You will also need to notify your house insurance company that your house will be vacant if you plan on moving out more than 30 days before the closing day.

Meet With Your Lawyer

You will need to meet with your lawyer to sign paperwork a few days before closing. You’ll also need to inform them of any utilities or property taxes you have paid for upfront, so you can be reimbursed by the new homeowner. Give one set of house keys to your lawyer so they can pass it onto the buyer’s lawyer at closing.

Take Care of Utilities

Like the home buyer, the home seller should also make sure to read any utility meters before they move, to make sure you only pay for what you used. You will also need to inform your cable and telephone provider that you will be disconnecting your service. Homes that are heated with an oil tank require the seller to make sure it’s filled on closing day.

Cancel Cheques & Arrange Your Move

If you’ve pre-authorized or post-dated cheques at your bank for any costs relating to your home, make sure you cancel them so you’re not paying for anything after closing. On the day of closing, we have no control over what time the change in ownership actually occurs. It’s best to plan on being out as early as you can. However, at the same time, the closing on your new home may not happen until nearer the end of the day. Just plan carefully.

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